PRINCIPLES 


OF 

RAILWAY  LEGISLATION. 


By  HON,  MARTIN  A.  KNAPP. 

Interstate  Commerce  Commissioner. 


Address  before  the  Railway  Congress  Auxiliary  of  the 
World’s  Columbian  Exposition,  June  23,  1893. 


REPRINTED  FROM  THE  RAILWAY  REVIEW. 


CHICAGO: 

The  Railway  Review,  818  The  Rookeky. 
1893. 


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PRINCIPLES  OF  RAILWAY  LEGISLATION. 


No  topic  of  current  discussion  is  more  important  or 
perplexing  than  the  appropriate  scope  of  legislative 
enactments  relating  to  the  business  of  common  car- 
riers. It  is  a subject  which  may  well  command  the 
most  thoughtful  reflection,  for  it  touches  the  welfare 
of  every  person  and  taxes  the  resources  of  public 
authority.  Transportation  by  rail  is  of  such  recent 
origin,  and  has  developed  with  such  wonderful  rap- 
idity, that  neither  its  rights  nor  its  obligations  are 
yet  fully  defined.  The  railroad  of  to-day  is  not  only 
the  chief  agency  by  which  the  internal  commerce  of 
the  country  is  carried  on,  but  its  influence  is  so  power- 
ful and  its  relation  to  every  form  of  industry  so  in- 
timate and  vital,  that  its  proper  place  within  the 
sphere  of  government  control  presents  an  inquiry  of 
the  gravest  import. 

Such  consideration  of  this  question  as  I may  venture 
to  attempt  on  the  present  occasion  leaves  out  of  view, 
for  the  most  part,  the  law  making  power  of  the 
several  states.  That  power  has  been  lavishly 
exercised  hitherto  in  creating  the  multitude  of 
corporations  which  furnish  the  facilities  of  railway 
conveyance,  and  which  have  sprung  into  being  as  if 
born  of  enchantment. . Already  their  lines  stretch 
cut  in  every  direction  from  one  end  of  the  land  to  the 
ether.  They  have  bridged  the  rivers,  penetrated  the 
wilderness,  climbed  over  mountains  and  traversed 
the  deserts  with  their  highways  of  steel.  They  have 
enriched  every  occupation,  given  multiplied  value  to 
every  pursuit  and  made  our  vast  wealth  possible; 


49958 


— 2 — 

they  are  at  once  the  greatest  achievement  and  the 
greatest  necessity  of  social  and  industrial  progress. 

But  these  manifold  benefits  have  not  been  realized 
without  their  attendant  evils.  The  resistless  energy 
which  has  produced  these  marvels  of  enterprise  and 
utility  was  not  always  begotten  of  wisdom;  it  was 
sometimes  the  fatal  offspring  of  folly.  Excessive  and 
premature  construction  has  been  forced  by  popular 
demand,  or  found  its  incentive  in  visionary  and 
baseless  expectations.  The  schemes  of  reckless  spec- 
ulation have  often  resulted  in  a capitalization  wholly 
unwarranted  by  cost  or  earnings,  while  the  tempta- 
tions of  financial  necessity  have  furnished  an  excuse 
for  dishonest  management.  The  opportunity  to  en- 
gage in  the  business  of  railroad  transportation  has 
been  practically  unlimited,  because  under  the  laws  of 
the  different  states  the  formation  of  railway  corpora- 
tions is  easily  effected,  and  the  restraints  to  which 
they  are  subjected  meager  and  ineffectual.  Invested 
with  extraordinary  powers  and  used  not  unfrequently 
as  the  instrument  of  personal  ambition,  they  hav 
been  projected  in  many  instances  without  reference 
to  public  requirements,  and  maintain  a precarious 
existence  by  the  constant  and  shameful  disregard  of 
private  rights.  This  prolific  creation  of  common  car- 
riers by  the  facile  machinery  of  local  statutes  finds  its 
inevitable  outcome  in  the  present  situation.  We  are 
confronted  with  an  aggregation  of  independent  rail- 
roads, all  of  which,  with  few  exceptions,  derive  their 
origin  and  their  power  from  state  authority.  The 
vast  operations  which  they  carry  on  are  controlled  by 
separate  boards  of  management,  and  the  relations  be- 
tween different  lines  are  friendly  or  hostile  as  interest 
or  caprice  may  determine.  Their  united  capacity 
greatly  exceeds  the  volume  of  traffic  furnished  for 
transportation,  and  so  a large  part  of  the  competitive 
business  must  either  be  parceled  out  by  unstable 
agreements  or  contested  for  from  day  to  day  with 
ruinous  rate  cutting  and  vicious  discriminations. 
Every  new  line  increases  the  friction,  and  frequent 
receiverships  testify  the  pecuniary  burdens  which 
current  revenues  will  no  longer  bear. 

It  is  now  so  generally  conceded  as  to  make  argu- 


— 3 — 

ment  unnecessary,  that  remedial  legislation,  suited 
to  present  conditions  and  adequate  to  permanent  re- 
lief, must  come  from  the  general  government.  The 
restricted  jurisdiction,  and  other  obvious  limitations 
upon  the  powers  of  the  several  states,  preclude  the 
exercise  of  that  comprehensive  and  efficient  authority 
required  for  the  regulation  of  public  carriers.  The 
business  of  transportation,  more  than  any  other,  has 
become  national  in  its  character,  and,  therefore,  the 
laws  by  which  its  agencies  are  controlled,  by  which 
its  duties  and  privileges  are  measured,  through  which 
its  abuses  are  to  be  corrected  and  under  which  its 
greatest  advantages  may  be  secured,  must  be  uniform 
in  their  operation  and  co-extensive  with  the  interests 
to  which  they  relate.  Upon  this  assumption,  which 
may  safely  be  made,  we  are  brought  to  the  wide  range 
of  possibilities  within  the  sphere  of  congressional 
action.  At  one  extreme  lies  the  policy  of  non-inter- 
ference, at  the  other  extreme  is  government  owner- 
ship. Congress  may  return  to  the  attitude  which  it 
occupied  before  the  act  to  regulate  commerce  was  en- 
acted; it  may  refuse  to  assert  any  authority  over  the 
movements  of*  interstate  traffic,  and  remit  all  carriers 
to  state  supervision  and  the  uncertain  influences  of 
natural  laws,  or  it  may  inaugurate  a scheme  by  which 
the  various  railways  and  water  lines  shall  be  acquired, 
and  make  the  national  government  sole  proprietor  of 
all  the  facilities  of  transportation.  Prior  to  1887 
congress  had  made  comprehensive  effort  to  regulate 
commerce  between  the  states.  Its  constitutional 
power  in  this  direction  had  never  been  exercised  and 
consequently  never  tested.  The  railroads  had  already 
absorbed  a large  portion  of  the  carrying  trade  and 
were  prosecuting  their  operations  far  and  wide,  re* 
gardless  of  state  boundaries  and  restrained  only  by 
the  lax  and  insufficient  provisions  of  the  local  statutes 
by  which  they  were  chartered.  Under  this  system, 
or  want  of  system,  which  characterized  the  history 
of  railway  legislation  up  to  a recent  period,  there 
arose  a series  of  evils  and  abuses  which  the  stales 
seemed  powerless  to  suppress,  and  which  assumed 
jBuch  startling  proportions  that  the  interference  of 
congress  was  vehemently  demanded.  So  the  statute 


— 4 — 

of  1887  wa9  adopted  and  the  work  of  regulation  com- 
menced. There  is  no  longer  much  doubt,  I appre- 
hend, among  those  qualified  to  judge,  that  the  supreme 
authority  of  the  nation  ought  to  be  exerted,  to  some 
extent  at  least,  in  overseeing  the  movement  and 
supervising  the  methods  of  interstate  commerce. 
The  business  of  the  railroads  has  become  so  immense, 
the  interests  they  effect  are  so  enormous  and  far 
reaching,  that  their  own  prosperity,  scarcely  less 
than  the  protection  of  the  public,  requires  some  meas- 
ure of  national  regulation.  Indeed,  many  of  the 
ablest  and  most  prominent  railway  managers  avow 
their  conviction  that  government  supervision  in  one 
form  or  another  is  an  admitted  and  palpable  neces- 
sity. No  incident  in  this  connection  has  greater 
significance  than  the  recent  appearance  before  a con- 
gressional committee  of  men  like  Mr.  Depew,  of  the 
New  York  Central;  Mr.  Roberts,  of  the  Pennsylva- 
nia, and  others  of  similar  standing,  representing  the 
most  important  lines  and  nearly  half  the  railway  mile- 
age of  the  United  States,  insisting  that  the  railroad 
interests  of  the  country  require  federal  protection, 
and  urging  that  greater  power  and  efficiency  be  given 
to  the  present  statute.  The  force  of  their  statements 
is  not  impaired  by  the  circumstance  that  they  advo- 
cated a particular  amendment,  for  their  utterances 
were  positive  and  unequivocal  in  favor  of  national 
regulation.  But  whatever  may  be  the  attitude  of  the 
railroads  upon  this  question,  the  idea  that  the  strong 
arm  of  the  general  government  shall  hold  the  bal’ 
ance  of  power  between  the  carriers  and  the  people 
has  taken  a secure  and  permanent  hold  upon  public 
opinion.  There  is  a growing  perception  of  the  de- 
pendence of  every  occupation  upon  the  agencies  by 
which  internal  commerce  is  conducted,  and  an  in- 
creasing determination  to  subject  those  agencies  to 
all  needful  control.  The  people  will  not  tolerate  the 
wrong-doing  and  injustice  which  fird  opportunity  in 
the  absence  of  legal  restraints,  and  it  may  be  accepted 
as  a settled  proposition  that  interstate  transportation 
will  henceforth  be  regulated  by  federal  authority. 
The  alternative  of  government  ownership,  with  its 
consequent  monoply  of  the  carrying  trade,  while  reo- 


ommended  strenuously  by  some,  has  thus  far  made  lit- 
tle impression  upon  public  sentiment  and  exhibits  no 
signs  of  popular  approval.  It  is  a project  which  seems 
wholly  inharmonious  with  the  spirit  and  aims  of  de- 
mocracy, a scheme  of  such  dangerous  import  that  it 
will  be  looked  to  for  relief  only  wnen  all  other  reme- 
dies have  proved  unavailing.  Neither  its  feasibility 
nor  its  effects  deserve  serious  discussion. 

Now,  within  the  broad  field  which  invites  the  law- 
making power  of  congress,  between  non-interference 
which  has  been  definitely  abandoned  and  government 
ownership  which  is  at  present  impossible,  what  legis- 
lation is  most  practical  and  appropriate,  and  by  what 
statutory  policy  will  the  rights  and  relations  both  of 
shippers  and  carriers  be  most  usefully  controlled. 
This  is  the  question  of  immediate  importance,  a ques- 
tion which  dismays  by  the  difficulties  it  presents,  yet 
one  which  fascinates  attention  bv  the  vast  interests 
it  concerns. 

It  is  not  my  purpose,  nor  does  it  appear  suitable  at 
this  time,  to  discuss  in  detail  the  various  plans  which 
have  been  proposed,  nor  to  make  myself  an  advocate 
of  particular  measures.  I undertake  nothing  more 
than  to  set  forth,  in  my  own  way  and  from  my  own 
standpoint,  some  general  considerations,  which  in  my 
judgment,  should  indicate  the  range  and  determine 
the  character  of  legislative  action. 

In  the  foremost  place,  chief  of  all  others,  is  the  dis- 
tinctive nature  and  peculiar  office  of  public  transpor- 
tation. Upon  this  subject  there  is  still  much  confus- 
ion of  thought  and  a surprising  want  of  correct  under- 
standing. The  partiality  and  injustice  which  give 
rise  to  such  frequent  complaints  against  common  car- 
riers may  be  attributed  in  many  instances  to  a com- 
mon misconception  of  the  nature  of  their  services  and 
the  office  which  they  perfoim.  The  inherent  differ- 
ence between  transportation  and  the  various  indus- 
trial pursuits  which  depend  upon  it  is  often  ignored 
or  wholly  overlooked.  Both  the  managers  and  the 
patrons  of  railroads  are  slow  to  perceive  that  the  bus- 
iness of  public  carriage  is  unlike  other  occupations. 
Even  the  opinions  of  learned  judges  and  the  language 
of  local  enactments  not  unfrequently  disclose  ignor- 


— fi- 
ance or  indifference  respecting  this  distinction.  The 
laws  by  which  railway  corporations  are  created  are 
framed,  in  close  analogy  to  the  statutes  under  which 
corporate  bodies  are  organized  for  other  purposes, the 
legal  regulations  applied  to  their  operation  and  man- 
agement are  substantially  the  same  for  both  classes, 
and  in  a variety  of  ways  the  public  function  of  the 
former  is  confounded  with  the  private  interests  of  the 
latter.  Now  it  cannot  be  too  strongly  insisted  upon 
that  the  “right”  of  a corporation  to  construct  and  op- 
erate a railroad  is  fundamentally  and  radically  differ- 
ent from  the  “right”  of  the  public  to  use  and  enjoy 
its  facilities.  It  is  one  thing  to  own  a railway,  it  is 
quite  another  thing  to  be  entitled  to  its  services.  One 
is  a property  right,  the  other  a personal  right;  one 
is  a possession,  the  other  a privilege;  one  is  an  ac- 
quisition, the  other  an  endowment;  one  may  be  bar- 
tered away,  the  other  is  “inalienable.”  In  the  very 
nature  of  social  order,  transportation  is  a necessity.  It 
stands  in  the  catalogue  of  primary  wants.  To  provide 
the  highways  of  travel  and  the  agencies  of  commer- 
oial  exchange  is  a function  of  government  in  every 
sense  legitimate  and  in  every  respect  essential.  To 
regard  these  agencies  as  a species  of  property,  sub- 
ject to  the  same  rules  which  govern  the  accumulation 
and  enjoyment  of  other  possessions,  is  a mistaken 
and  mischievous  conception.  Transportation  is  not  a 
commodity.  Its  physical  appliances,  its  fixtures  and 
franchises  are  property,  they  are  acquired;  not  so 
the  right  to  its  facilities,  that  is  enjoyed.  The  owner- 
ship of  the  carrier  is  the  privilege  of  the  public.  This 
privilege  differs  from  every  form  of  private  enter- 
prise for  it  is  afforded  by  virtue  of  authority  proceed- 
ing from  the  state.  There  is  no  natural  right  in  the 
individual  to  engage  in  the  business  of  railway  trans- 
portation, because  that  business  can  be  carried  on 
only  by  taking  private  property  against  the  will  of 
the  owner,  and  that  high  prerogative  belongs  to  the 
government  alone.  To  provide  the  necessary  means 
of  public  carriage,  the  railroad  must  exercise  extra- 
ordinary powers  which  are  secured  from  and  dele- 
gated by  the  state.  Through  these  delegated  powers, 
by  the  aid  of  this  unusual  and  supreme  authority,  it 


participates  in  the  duties  of  civil  administration  and 
discharges  obligations  which  are  founded  in  the  con- 
stitution of  society.  The  railroad,  therefore,  can 
rightfully  do  nothing  which  the  state  itself  might  not 
do  if  it  performed  this  public  service  by  its  own 
agents  instead  of  intrusting  it  to  corporations  which 
it  has  created. 

Upon  this  foundation,  laid  in  the  nature  and  neces- 
sities of  social  order,  rests  the  inherent  right  of  every 
person  to  just  and  equal  treatment  in  all  that  per- 
tains to  public  transportation.*  In  fixing  the  basis  of 
rates  and  charges  no  carrier  should,  be  permitted  to 
make  discriminations  either  between  individuals  or 
localities.  The  right  to  use  the  agencies  by  which 
inter-communication  is  effected,  and  by  which  all  the 
products  of  labor  acquire  exchangeable  value,  is  a 
common  and  fundamental  right,  the  very  essence  of 
which  is  equality.  If  the  government  itself  should  un- 
dertake to  supply  the  public  need  in  this  direction, 
no  sort  of  partiality  would  be  tolerated  or  attempted. 
Every  function  which  the  state  performs,  every 
power  which  it  directly  exercises  and  every  activity 
which  it  exclusively  controls,  must  be  for  the  equal 
benefit  of  all.  Any  difference  between  wholesale  and 
retail  prices  for  the  privileges  and  immunities  which 
public  authority  is  bound  to  provide  is  offensive  and 
intolerable.  For  the  government  to  make  distinc- 
tions in  its  modes  of  operation  by  reason  of  the 
amount  of  service  which  it  maybe  required  toper- 
form,  or  on  account  of  the  differing  industries  and  oc- 
cupations of  its  subjects,  is  to  depart  from  its  legiti- 
mate sphere  and  violate  the  principle  upon  which  it 
is  founded.  The  farmer  who  sends  but  one  letter  a 
year  is  entitled  to  the  same  rate  of  postage  as  the 
merchant  who  sends  hundreds  a day.  The  measure 
of  import  duties  is  the  same  whether  the  entry  be  a 
case  or  a cargo.  The  amount  of  service  never  affects 
the  relative  price.  Much  or  little,  it  is  all  in  the 
same  proportion. 

This  is  the  rule  which  should  be  rigidly  applied  to 
public  transportation.  Impartiality,  strict  and  un- 
varying, is  the  requirement  which  should  be  firmly 
imposed,  and  from  that  standard  no  deviation  should 


— 8 — 

be  permitted.  The  carrier  may  not  be  allowed  to 
discriminate  between  individuals  on  account  of  their* 
position,  influence  or  personal  qualities,  for  these  dis- 
tinctions furnish  no  ground  for  giving  one  person 
■cheaper  conveyance  that  another.  The  large  shipper 
is  entitled  to  no  advantage  over  his  smaller  compet- 
itor, either  as  to  charges  or  facilities,  for  both  should 
be  served  at  the  same  rate.  If  concessions  to  particu- 
lar persons  because  of  their  greater  patronage  would 
not  be  possible  under  government  ownership,  they 
should  not  be  permitted  under  private  ownership.  If 
in  one  case  the  rule  of  equality  would  be  observed,  in 
the  other  it  should  be  enforced.  As  I view  the  mat- 
ter, the  state  has  as  much  right  to  farm  out  the  busi- 
ness of  collecting  revenues  or  preserving  the  peace,, 
and  allow  the  parties  performing  those  offices  to  vary" 
the  rate  of  taxation  according  to  their  own  interest, 
or  sell  personal  protection  to  the  highest  bidder,  a & 
it  has  to  permit  the  great  function  of  public  carriage 
to  be  the  subject  of  special  bargain  and  secret  dicker, 
to  be  made  unequal  by  favoritism  or  oppressive  by" 
extortion.  No  service  which,  government  undertakes* 
to  perform  can  be  more  useful,  and  no  duty  which 
rests  upon  it  is  more  imperative,  than  to  secure  U> 
the  people  just  and  equal  treatment  by  every  common 
carrier. 

This  duty  is  recognized  with  great  clearness  of  per- 
ception in  the  act  to  regulate  commerce.  It  was 
the  intention  of  congress  in  that  enactment  to  insure 
fairness  and  impartiality  in  all  that  relates  to  rail- 
way transportation.  The  provisions  of  the  act  are 
restrictive  in  character  and  they  call  for  a construc- 
tion in  harmony  with  their  beneficent  aims.  It  is* 
much  to  be  regretted  that  the  federal  courts,  in  some 
instances  at  least,  have  seemed  unable  to  realize  their 
scope  or  to  appreciate  their  purpose.  The  grave 
conditions  which  existed  when  this  statute  was  passed 
appear  to  have  been  left  out  of  view,  and  full  weight 
has  not  been  accorded  to  the  express  declaration  that 
its  regulative  features  were  an  addition  to  remedies* 
furnished  by  the  common  law.  It  was  the  design  of 
congress  to  provide  something  more  than  a procedure 
for  the  correction  of  demonstrated  wrongs;  its  higher 


— 9 - 

and  broader  endeavor  was  to  prevent  wrong  doing. 
To  that  end  general  rules  for  the  government  of  car- 
riers were  prescribed,  rules  well  calculated,  it  would 
seem,  to  secure  the  actual  and  relative  equality  which 
results  from  effective  regulation.  The  filing  and  pub- 
lication of  rate  sheets,  for  example,  is  not  merely  a, 
standard  for  determining  whether  particular  charges 
are  unjust  or  discriminatory, and  by  which  reparation 
to  injured  parties  may  be  measured,  but  the  more  sig- 
nificant purpose  is  found  in  the  provision  that  the  rates 
so  filed  and  published  are  the  only  compensation 
which  the  carrier  may  charge,  collect  or  receive.  It 
is  not  left  for  any  tribunal  to  decide  whether  a var- 
iation in  rates  for  like  and  contemporaneous  service 
inflicts  injury  upon  an  individual  or  a community; the 
law  itself  declares  that  a departure  from  schedule 
charges  is  per  se  unjust  discrimination  and  unlawful. 
The  long  and  short  haul  clause  contains  a similar  de- 
claration. It  is  unnecessary  to  show  that  undue 
preference  or  prejudice  results  from  charges  which 
are  greater  for  longer  than  for  shorter  distances 
over  the  same  line,  for  such  an  adjustment  of  rates  in 
ordinary  cases  is  condemned  by  the  terms  of  the 
statute.  Yet  some  judges  have  construed  these  pro- 
hibitions as  applying  only  where  actual  damage  re- 
sults to  an  assignable  person.  Such  a construction 
virtually  treats  the  carrier  as  a private  corporation, 
takes  little  account  of  its  public  obligations,  and  over- 
looks the  real  purpose  of  the  law  making  power  in  en- 
joining compliance  with  its  requirements.  The  pecul- 
iar office  which  transportation  performs  is  often  ob- 
scured by  issues  founded  upon  individual  rights,  and 
concrete  questions  arising  from  the  contract  relations 
between  shipper  and  carrier  notunfrequently  exclude 
considerations  of  public  policy  far  more  important 
than  the  particular  controversy.  For  these  reasons 
the  early  action  of  congress  should  be  invoked  for  a 
legislative  construction  of  important  features  of  the 
act,  an  interpretation  so  definite  and  unmistakable 
that  neither  can  its  provisions  be  questioned  nor  its 
wholesome  purpose  defeated.  Crude  and  imperfect 
as  this  statute  is,  difficult  of  enforcement  and  weak- 
ened by  adverse  decisions,  nevertheless  it  is  the  legis- 


— 10  — 


lative  expression  of  a great  and  vital  principle.  It 
contains  the  substance  of  correct  doctrine  respecting 
the  office  and  obligations  of  public  carriers,  and  em- 
phasizes the  conviction  that  their' proper  regulation 
is  a recognized  national  duty. 

In  a general  sense  it  is  quite  true  that  all  measures 
of  legislation  are  means  to  the  one  end  of  securing, 
at  all  times  and  under  all  circumstances,  just  and 
equal  charges  for  public  transportation.  But  in  de- 
vising the  legal  machinery  by  which  that  consumma- 
tion shall  be  most  speedily  reached,  and  the  full  ben- 
efits of  equality  most  completely  enjoyed,  other  con- 
siderations than  those  relating  to  the  nature  and 
office  of  public  carriage  demand  earnest  and  thought- 
ful attention.  I am  very  much  impressed  with  the 
notion  that  the  facilities  of  domestic  transportation, 
the  agencies  by  which  intercommunication  is  main- 
tained and  the  distribution  of  industrial  products 
effected,  should  be  regarded  in  their  entirety  and 
treated  as  a single  and  indivisible  unit  for  all  the  pur- 
poses of  legal  regulation.  Every  railway  and  every 
water  line  constitutes  an  inseparable  element  of  a 
vast  and  intricate  organism.  There  are  many  mem- 
bers, yet  but  one  body.  Practically,  there  is  no  such 
thing  as  an  independent  and  isolated  carrier  by  rail 
or  by  water.  Bitween  the  different  parts  of  this  com- 
plex system  there  is  such  mutual  dependence,  such 
intimate  relationship,  that  whatever  affects  one  must 
in  greater  or  less  degree  affect  the  others  also.  If 
one  member  suffers  all  the  members  suffer  with  it. 
Transportation  is  a constant  and  a universal  neces- 
sity. There  is  no  time  when  its  facilities  can  be  dis- 
pensed with,  no  place  where  its  services  are  not 
urgently  demanded.  It  is  the  ever-present  and  un- 
yielding condition  upon  which  personal  welfare  and 
social  progress  continually  depend.  For  this  reason 
state  legislation  is  unsuitable  in  scope  and  must  be 
inadequate  in  action.  It  is  influenced  by  the  circum- 
stances and  prejudices  of  locality,  and  is  therefore 
unequal  in  its  operation  and  changeable  in  its  at- 
tempted restraints.  So  far  as  it  undertakes  the  task 
of  regulation,  it  is  liable  to  be  feeble  and  inefficient 
in  results,  or  it  may  be  so  vexatious  and  burdensome 


— li- 


as to  be  plainly  oppressive.  Both  habits  find  illus- 
tration in  local  statutes  quite  recently  enacted.  But 
the  function  of  public  carriage  cannot  be  separated 
into  parts,  as  the  country  is  divided  into  states.  By 
the  union  of  sovereignties  it  becomes  interstate  and 
national.  It  cannot  be  segregated  without  fatal  im- 
pairment. It  is  the  nerve-power  of  the  nation,  sensi- 
tive to  its  furthest  extremities;  to  divide  it  is  to  de- 
stroy it.  The  laws  which  regulate  property  in 
different  localities  may  be  variable  and  conflicting 
without  serious  injury,  but  the  laws  which  regulate 
commerce  must  be  uniform  and  harmonious  in  all 
the  territory  which  submits  to  one  jurisdiction. 
Bights  which  are  acquired  may  be  varying  and  dis- 
similar as  between  one  state  and  another,  but  rights 
which  are  inalienable,  which  are  a privilege  and  not 
a possession,  must  have  common  and  equal  protection 
in  every  part  of  the  union. 

This  point  of  view  permits  two  or  three  more 
specific  observations.  If  the  propositions  already 
stated  are  correct,  it  follows  that  any  scheme  of  legis- 
lative control  designed  to  give  greater  efficiency  and 
value  to  this  public  service, and  to  promote  thereby  the 
general  welfare, should  embrace  in  its  provisions  all  the 
agencies  of  transportation  which  are  within  the  jur- 
isdiction of  the  general  government.  The  act  to  reg- 
ulate commerce,  therefore,  is  insufficient  in  scope,  be- 
cause it  extends  only  to  interstate  carriers  by  rail  and 
leaves  untouched  and  unregulated  the  great  volume 
of  traffic  which  seeks  transportation  by  water.  But 
rail  carriage  and  water  carriage  are  inseparably 
connected.  They  act  and  react  upon  each  other.  They 
cannot  be  disassociated  in  fact  and  ought  not  to  be  in 
law.  Their  united  facilities  are  demanded  by  pub- 
lic requirement,  they  join  in  a common  service.  The 
internal  water  routes  by  lake,  river  and  canal,  and 
the  coastwise  lines  of  gulf  and  ocean,  transport  an 
enormous  tonnage  between  points  near  and  remote, 
nnd  thereby  give  indispensable  aid  to  commercial 
prosperity.  They  are  confined  to  the  highways  which 
nature  has  provided,  while  the  railroad  can  choose  its 
location  and  change  it  at  pleasure.  Each  mode  of 
conveyance  has  its  peculiar  advantages,  each  is  a 


12  — 


competitor  for  public  favor.  Both  of  them  partici- 
pate in  interstate  carriage,  and  the  constitutional 
power  of  congress  “to  regulate  commerce  between 
the  several  states”  applies  with  full  efficacy  to  all  the 
agencies  of  water  transportation.  The  same  reasons 
which  induced  the  law  making  power  to  place  rail- 
way lines  under  specific  restraints  call  for  like  limi- 
tations upon  the  delegated  powers  with  which  water 
carriers  are  also  invested.  The  circumstance  that 
one  carrier  uses  the  natural  facilities  of  intercom- 
munication, while  an  artificial  roadway  must  be  con- 
structed by  the  other,  affords  no  excuse  for  exempt- 
ing the  former  from  any  obligation  rightfully  im- 
posed upon  the  latter.  Each  forms  a part  of  an  insep- 
arable system,  each  is  the  custodian  of  a public  privi- 
lege, and  each  should  be  amenable  to  public 
authority.  Not  only  on  the  grounds  of  abstract  jus- 
tice, but  for  the  benefit  of  the  people  and  in  further- 
ance of  the  objects  for  which  the  duty  of  railway  reg- 
ulation was  assumed,  the  government  should  include 
in  its  plan  of  supervision  all  the  agencies  of  water 
transportation  within  its  jurisdiction. 

Again,  no  just  theory  of  legislative  action  will  pro- 
ceed upon  the  assumption  that  the  people  alone  are 
in  need  of  protection  and  that  the  railroads  can  take 
care  of  themselves.  I have  little  sympathy  with  such 
an  unfair  and  illogical  contention.  Between 
shippers  and  carriers  there  is  reciprocal  dependence 
rather  than  mutuality  of  interest.  Neither  can  exist 
alone,  neither  is  independent.  The  bonds  which 
hold  them  together  are  indissoluble,  yet  are  they  so 
conjoined  that  one  of  them  cannot  gain  undue  advan- 
tage without  positive  injury  to  the  other.  The  ship- 
per is  entitled  to  have  his  property  transported  at  a 
reasonable  price,  the  carrier  is  equally  entitled  ta 
reasonable  compensation  for  performing  the  service. 
The  collision  of  pecuniary  motives  by  which  both 
parties  are  influenced  gives  rise  to  the  controversy 
over  rates  and  charges.  This  conflict  is  incessant 
and  sometimes  extremely  severe.  But  the  shipper 
is  not  always  the  under  dog  in  the  fight.  It  happens 
upon  occasion  that  he  gets  much  the  best  of  the  bar- 
gain. The  necessity  of  the  carrier  is  not  unfrequent- 


— 13  — 

ly  the  opportunity  which  the  shipper  does  not  scruple 
to  turn  to  his  own  profit.  Odious  extortions  have 
often  been  practiced  by  carriers,  but  shippers  also 
are  sometimes  arbitrary  and  unjust.  The  public  ser- 
vice in  which  the  carrier  engages  is  undertaken  for 
private  gain;  the  shipper  avails  himself  of  this  public 
service,  likewise  for  private  gain/  The  selfish- 
ness of  human  nature  is  on  both  sides  of  the  trans- 
action. Now  the  object  of  legal  regulation  is  to 
hold  these  opposing  forces  in  stable  equilibrum,  to 
reduce  contests  and  complaints  to  a minimum,  and  to 
bring  the  dealings  between  shipper  and  oarrier  under 
the  control  of  mutual  justice.  The  sufficient  scheme 
of  legislation,  therefore,  will  recognize  the  possibility 
of  wrong-doing  on  one  side  as  well  as  the  other,  it 
will  be  judicial  rather  than  partisan  in  its  aims  and 
requirements,  and  while  equipping  the  shipper  with 
ample  protection  will  also  furnish  the  carrier  with  all 
needful  defenses.  This  seems  especially  true  of  rela- 
tive rates  between  competing  centers  of  trade  and  be- 
tween competitive  articles  of  traffic.  Questions  of  this 
character  are  constantly  arising  and  their  intricacy 
is  beyond  all  comparison.  They  must  be  brought  to 
solution  by  judicial  procedure  and  judicial  determi- 
nation. So  far  as  the  law  can  provide  remedies  for 
grievances  of  this  description  they  should  be  avail- 
able to  the  carrier  as  well  as  to  the  shipper.  It  may 
sometimes  occur  that  just  results  can  be  reached  only 
by  directions  which  tend  to  the  pecuniary  advantage 
of  the  carrier;  but  justice  is  the  end  to  be  attained 
by  remedial  legislation,  and  its  defeat  should  never 
be  occasioned  by  defective  or  one  sided  enactments. 
I,  therefore,  concur  with  Judge  Veazey  that  the  power 
to  determine  what  charges  are  reasonable,  a power 
without  which  all  attempts  at  regulation  are  delusive, 
should  include  and  carry  with  it  the  power  to  pre- 
scribe minimum  as  well  as  maximum  rates.  Reason- 
able payment  by  the  shipper  arid  reasonable  remuner- 
ation to  the  carrier  are  alike  involved  in  the  idea  of 
public  regulation;  and  legislation  which  expresses 
the  full  meaning  of  such  regulation,  and  makes  its 
full  purpose  effective,  will  not  be  wanting  in  provis- 


— 14- 

ions  which  conserve  the  interests  both  of  the  public 
and  the  public  servant. 

It  goes  without  saying  that  the  regulative  powers 
conferred  upon  congress  by  the  federal  constitution 
are  not  wisely  or  justly  exerted,  if  the  effect  of  their 
operation  diminishes  the  ability  of  domestic  carriers 
to  meet  the  competition  of  rivals  not  subject  to  our 
jurisdiction.  The  proposition  requires  no  argument. 
While  due  regard  should  be  had  for  the  interests  of 
American  shippers  and  passengers,  it  is  manifest  that 
no  advantage  in  respect  to  domestic  traffic  should  be 
given  to  foreign  lines  of  transportation  by  means  of 
inflexible  restrictions  upon  our  own  carriers.  The 
true  policy  will  be  found,  I apprehend,  in  compelling 
these  foreign  roads,  under  the  coercion  of  statutory 
restraints  imposed  by  congress,  to  practically  subject 
themselves  to  the  provisions  of  the  act  to  regulate 
commerce  by  making  compliance  with  its  require- 
ments the  condition  of  engaging  in  internal  local 
business. 

This  view  of  the  nature  and  office  of  public  trans- 
portation, and  the  necessity  for  its  just  and  uniform 
regulation  by  federal  authority,  forces  upon  us  an- 
other question  of  immediate  and  pressing  import- 
ance, concerning  which  I feel  bound  to  state  in  a few 
words  my  personal  convictions.  Legislation  i pon 
this  subject,  I am  thoroughly  persuaded,  to  be 
adequate  in  design  and  capable  of  accomplishing 
the  most  useful  results,  must  recognize  an  1 
adjust  itself  to  the  co-operative  tendencies 
which  mark  the  closing  decade  of  the  nine- 
teenth century.  The  advent  of  steam  and  elec- 
tricity has  not  only  wrought  a revolution  in  all  the 
methods  of  distribution  and  exchange,  but  is  fast  un- 
dermining the  economic  theories  so  long  and  so  im- 
plicitly accepted.  It  is  folly  to  shut  our  eyes  to  un- 
mistakable facts,  or  to  stand  in  the  way  of  inevitable 
events.  The  competitive  philosophy  of  Adam  Smith 
may  have  satisfied  the  era  of  stage  coaches  and  spin- 
ning wheels,  but  it  will  not  answer  the  purpose  or 
meet  the  requirements  of  this  marvelous  generation, 
so  restless  in  thought  and  resistless  in  action.  As. 
astronomy  has  been  corrected,  theology  revised  and. 


— 15.— 

civil  administration  emancipated  from  the  tyranny  of 
irresponsible  power, so  our  political  economy, and  many 
inherited  notions  respecting-  the  diffusion  of  wealth 
and  the  acquisition  of  property,  must  be  largely 
modified,  if  not  wholly  reconstructed.  When  com- 
munities were  isolated  by  distance  and  the  sphere  of 
activity  confined  within  local  limits,  when  it  took 
two  weeks  to  haul  a wagon  load  of  goods  from  London 
to  Edinburgh,  the  attrition  of  rivalry  was  com- 
placently endured;  but  now  when  the  ocean  is  bridged 
by  the  steamship  and  every  sea  threaded  with 
whispering  wires,  when  the  swift  locomotive  rush- 
ing across  continents  like  the  shuttle  through  the 
loom,  weaves  this  many-hued  and  majestic  fabric  of 
commerce  which  covers  the  globe,  when  men  are  no 
longer  localized  in  effort  or  achievement,  and  the 
thought  of  one  is  the  instantaneous  possession  of  all, 
the  friction  of  unbridled  competition  has  become  irk- 
some and  intolerable.  * Some  relief  from  its  hard- 
ships and  some  check  upon  its  wastefulness  must 
surely  be  provided.-  Fools  may  deride  and  dema- 
gogues denounce,  but  neither  protestation,  nor  agita- 
tion, nor  legislation  can  impeach  the  utility  or  prev 
vent  the  advance  of  industrial  federation. 

Competition  is  essentially  selfish  in  its  nature,  un- 
brotherly  in  its  instincts  and  uncharitable  in  its 
methods.  It  is  the  effort  of  the  individual  to  gain 
personal  advantage  at  the  expense  of  his  fellows,  and 
its  cruel  creed  is  “every  man  for  himself. ” Such  a 
doctrine  is  quite  unsuited  to  the  interlacing  and  in- 
terdependent activities  of  a complex  civilization,  and 
wholly  unequal  to  tne  increasing  demands  of  associ- 
ated life.  The  whole  trend  of  modern  industry  is  to- 
wards wider  fraternity,  larger  organization,  cheaper 
production  and  distribution,  to  the  end  that  all  labor 
may  receive  more  stable  and  adequate  reward,  and 
thereby  the  welfare  of  wage  earner  and  wage  payer  as 
well,  most  surely  promoted.  As  the  implements  of 
modern  warfare  are  becoming  so  devastating  in  their 
effects  that  nations  will  be  compelled  to  live  in  amity,, 
so  the  destructiveness  and  exhaustion  of  competitive 
industry  make  monopoly  a necessity. 

In  the  vast  business  of  public  carriage — the  busi- 


— 16  — 


mess  which  unites  every  craft  and  vocation,  and  fur- 
nishes at  once  opportunity  and  incentive  for  every 
ipursuit — some  way  of  escape  must  be  afforded  from 
the  rigors  and  reprisals  of  unrestricted  competition. 
The  situation  of  many  railways  at  the  present  time  is 
not  unlike  that  of  the  great  powers  of  Europe.  Each 
in  a state  of  armed  neutrality  watches  the  other  with 
jealous  suspicion,  while,  in  their  most  amicable  rela- 
tions between  themselves,  they  maintain  an  approxi- 
mate peace  by  lavish  preparation  for  war.  The  pro- 
cess is  expensive,  the  result  unsatisfactory.  Their 
revenues  are  depleted,  their  management  embarassed, 
their  usefulness  greatly  impaired.  They  take  from 
the  substance  of  the  people  more  than  three  million 
of  dollars  a day,  an  enormous  tax  in  the  aggregate, 
yet  their  surplus  earnings  often  fall  below  the  re- 
quirements of  solvency,  and  are  seldom  sufficient  to 
relieve  the  anxiety  of  investors.  The  facts  of  com- 
mon experience  and  familiar  knowledge  demonstrate 
the  inconsistency  and  unwisdom  of  a legislative  pol- 
icy which  enforces  competition  by  legal  decree,  and 
at  the  same  time  condemns  as  misdemeanors  the 
methods  and  inducements  by  which  competition  is 
usually  effected.  The  time  has  come  for  harmonizing 
the  operations  and  combining  the  facilities  of  com- 
mon carriers,  that  they  may  better  meet  the  demand 
tor  equal  treatment,  stable  rates  and  cheaper  trans- 
portation. Surely  this  government  is  strong  enough 
and  great  enough,  surely  it  has  the  power  and  the 
sagacity, to  permit  this  incomparableser vice  to  be  per- 
formed by  friendly  association,  and  at  the  same  time 
provide  the  public  with  ample  protection  against  all 
the  dangers  of  corporate  monopoly. 


